Socialite Apocalypse: The Recessionistas

Four golden children get their comeuppance in Alexandra Lebenthal's new novel

In the late summer of 2008, as hedge funds tank and the Dow collapses, the Great Recession seeps into four Upper East Side socialites' glamorous lives in ways their pretty little Botoxed heads never imagined. Financial-firm CEO, high-society doyenne, and new novelist Alexandra Lebenthal has the inside knowledge to send up bitter divorce battles, flings with assistants, hidden assets in the Cayman Islands, illegal trading, and more in The Recessionistas (Grand Central, available August 9). It's the Finance 101 course you wish you took in college and the best end-of-summer read wrapped in one. I met up with Lebenthal at the Library at Loews Regency Hotel in Manhattan and spoke to her about Wall Street's collapse, women's issues with money, her go-to designers, and her debut novel.

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ELLE: You do it all—you're the President and CEO of your wealth-management firm, Alexandra & James, mother of three children, wife, board member of the School of American Ballet and several other institutions, writer for New York Social Diary, and now a novelist. A lot of women struggle to find balance and "do it all." How do you make it work?

Alexandra Lebenthal: You know, it's funny, because as you reel off that list of things, I do think to myself "this person sounds slightly crazy." It's a lot to do, but I like doing a lot of different things at once. I hate it when I'm not busy. The children part would not be possible without my husband. I'm truly, truly lucky to have a husband who has always been very much an active partner in raising them. If I worked for other people, I would not be able to do everything I do. When it's your own company, you have that freedom—and thank God for BlackBerry.

ELLE: Did you always know you wanted to write The Recessionistas?

AL: No, I really didn't at all. It's kind of funny how it came about, because I had been approached a number of years ago to write a book on investing, and I just thought, There's nothing that I'm going to add that isn't already on the shelves, and it seemed like a bit of a daunting task. Then I started writing the column for New York Social Diary, and David Patrick Columbia said to me, "You have this voice that not a lot of people have. You have one foot in the finance world and one foot in the social world, and I think people would want to hear what you have to say." And it hit me one day when I was walking up Park Avenue—this was right after Lehman Brothers' collapse. I was looking in the window of an apartment building, and I thought, I wonder if someone from Lehman lives there? And then I thought, You know, maybe that's what he was saying—I actually do know what these people look like, I do know what they do every day, and where they go at night. It was easy for me to talk about people in fictional terms. The book wasn't all that difficult to write. I loved doing it, and I loved that these people where in my head. I could stop them. I could start them. I could make them go this way or that way.

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ELLE: Do you have plans to write another novel anytime soon?

AL: I do. As a matter of fact, I was working on it this weekend. I have the story, but the characters are still not there. It's going to involve a little bit of a Ponzi scheme.

ELLE: Were your friends or clients worried that you'd use their life stories in this novel or future books?

AL: First off, clients would never ever, ever be a part of it. In terms of friends, people know that I very much respect privacy and confidentiality. Anything I heard about and wanted to include, I asked for their permission and then I'd change certain parts of it. I don't want to bite the hand that feeds me.

ELLE: Do you relate to any of the characters in The Recessionistas? I saw a little bit of your story in Sasha.

AL: Yes, the character I relate to the most is Sasha Silver. However, I will say that there are bits and pieces of me in all of the characters. Even in some of the unattractive ones. And I think that's the fun thing about writing fiction—you can just take a brush and paint so many different things within one character. But I think one of the things about Sasha that is very much a part of me is recognizing that whatever you want to do isn't dependent on other people letting you do it or giving you the opportunity or showing you the door to the corner office. It's about saying, "Alright, I want this, and I've made the choice, and now I'm going to go get it." And not letting yourself get woeful because other people aren't doing what you want them to do or being nice to you. A lot of what happened to her was based on experiences I had. I just need to go on the record and say that Adam [Sasha's husband] is not my husband. My husband is much better than that.

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ELLE: "What started as the American dream ultimately led to the American nightmare." The Recessionistas is a little black book filled with detail after detail about exactly how Wall Street's devastating hiccup led to this nightmare. It was like a little finance lesson. Why was it so important for you to really break down the inner workings of Wall Street in this book and explain to your readers just how this collapse materialized?

AL: I'm so glad you said that! That's what I really wanted to accomplish. It wasn't about exposing high society, which I really didn't do anyway. It was having the ability to talk about what happened in a way that became part of a story. You saw these people who worked at Lehman Brothers and any of these companies, and it was their life story, and yet it's affected all of us. The most important thing to me is that people really understand what happened. I actually envision a Wall Street couple, and he's just finished Andrew Ross Sorkin's Too Big To Fail, and she's reading The Reccesionistas, and then she says, "Oh, I know what happened during that Lehman weekend, because I was reading it in this book."

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ELLE: You collaborated with Judith Leiber to create the crystal rendition of the New York City skyline on the book's cover. How did this collaboration come about?

AL: It was the publisher's idea. I had gone to see them, and they were brainstorming ideas for the book's cover and the idea of a purse came up. I can't remember where the specific idea of Leiber came up, but they did it all on their own, and as soon as I saw it I thought it was absolutely brilliant. But what is happening, which is super exciting, is that Judith Leiber is doing their Fashion's Night Out party for the book. They're going to sell 100 Leiber bags for $100 each. All of the proceeds are going to the Rita Hayworth Alzheimer's Association, which is very important to me because my mom actually had it and just died last year of it.

ELLE: In 1995, you were included in Crain's 40 Under 40 Rising New York Stars, and you spoke briefly on your view of women's lack of knowledge about money. You called it a "deep-seated psychological issue." Fifteen years have passed: Do you think women are now more knowledgeable and involved in their finances, or do you believe that the majority of women today still avoid money and finance issues like the plague?

AL: That is such a great question. It's funny—I'm not surprised I said that, but I didn't remember that that's what I said at the time. Unfortunately, I think that a lot of that is still the case. What makes me sad about the whole topic is that women actually understand a lot of the concepts so much better than they ever give themselves credit for. They understand long-term savings, they understand goals, they understand budgeting, but I think the markets are so focused on making money today, and what is going up now and what the return is. Somehow, women feel that that's more important than long-term saving issues. So unfortunately, I think we are still in the dark ages. Women tend to be embarrassed to say they don't understand something. But with the Internet, there are so many opportunities for women to teach themselves, whether it's iVillage or Bankrate.com. There are ways for a woman to arm herself secretly, so when she does have to deal with someone and her money, she can be a little smarter. I also think women should understand and figure out what ways they feel most comfortable dealing with somebody who is handling their money. I think woman tend to be embarrassed to say, "Stop, I didn't understand what you said." Or ask to have a concept explained to them and then feel they don't have that sense of power to say, "Hold on a minute, you're dealing with my money I want you to go through all of this with me." I do think that women sometimes feel more comfortable dealing with a female financial advisor. It's sort of like taking a step back and finding the environment in which you'll feel most comfortable having someone handle your money.

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ELLE: Your grandmother worked in your family's firm, Lebenthal & Co., until she was 93. She is quoted as saying, "I don't mind the normal risks of business. Prices go up. Prices go down. I mind the abnormal risks. Dishonesty." The media has exposed a lot of dishonesty and greed on Wall Street recently. Do you think people will ever trust Wall Street again, and should they?

AL: You know, there are good people and bad people in any industry, and I think, having grown up with my grandmother and then my dad, I have this belief that there are good people who want to do right by people and their money, so I would say overall, yes. There are always going to be bubbles, there are always going to be greedy and dishonest people. Regulation will take care of some of that—but not all of it. My grandmother was always full of sayings like that.

ELLE: Do you think there should be stronger regulation and oversight of the financial industry of the kind that the Obama administration and the Democratic majority in Congress are currently attempting to enact?

AL: Again, I have a skepticism, given that when you look back over hundreds of years, there have always been bubbles—whether it was a tulip crisis or a housing crisis—so that will continue, but I do think the focus on creating a systematic way to measure risk and limiting the risk that big firms can take with huge chunks of their capital is incredibly important. If Lehman Brothers had not been allowed to take this much of their capital and lose it all, they would still have at least that much, and those companies would still be there. So also, looking at individual companies and saying we can't have companies too big to fail because we can't just pour money into them—I think that's really important as well. Starting in the mid-'90s and for almost a decade, you had these firms getting bigger and bigger. Look at the creation of Citigroup and the regulations that were waived so Citigroup could become what it is. I think these firms were really too big to manage, and I think limiting that is incredibly important. I think the whole consumer protection agency is also really important as well, but it's not just about Wall Street—it's also about the banks, too, and them not giving loans or mortgages to people who shouldn't have them. But overall, I'm very supportive of it.

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ELLE: What sectors would you recommend ELLE women to invest in?

AL: I think that, particularly, younger women who do not have a lot of money to invest are much better off investing in mutual funds or exchange-traded funds, where you're not investing in a specific company, you're letting a professional manager invest for you and diversify your portfolio. However, there is this idea that goes back to Peter Lynch, a great money manager from Fidelity, who said that if you know an industry and like a company and believe in what they're doing, you should invest in it. I do recommend taking a little money and investing in a company that you really believe in.

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ELLE: On June 9th you spoke at a 92nd Street Y event with Jean Chatzky and Karen Finerman about money and the economy. Can you tell us a little bit about how this event went? What would you hope that women took away from these events?

AL: One of the things that came out of it—which again goes back to how women handle their money—is that a lot of women think their financial advisor is their friend. They think he will never do them wrong. It was eye-opening and a little disconcerting that women still believe someone is going to take care of them, whether it's a husband or a financial advisor or what have you. Women still need to empower themselves or go to places where they can be empowered, and that was one of the great things about the event that night.

ELLE: Suze Orman was supposed to be the third speaker but was unable to attend. She's been criticized for giving "too basic" financial advice on The Suze Orman Show and in her books. Do you think this criticism is fair?

AL: I do think she needs to focus more on investing specifics. However, she has done an amazing job in giving woman the realization and that feeling of empowerment that they have the ability to control their own finances.

ELLE: You've said that you wear your jewelry as your armor. Why do you refer to it that way?

AL: Because I think that you can feel your jewelry, you can see the colors and the shapes of it, and it adds to how you feel about yourself. When I first came to this realization, I was in my early 30s. I was on an industry board, and I remember being at this long, long board table of almost all men, probably about 28 men and two women, and they were all older, and I remember feeling like, I'm so out of place here, but I'm here for a reason and I'm not just going to fade into the background. My jewelry and the colors of my clothing and what I wore became very much a part of that.

ELLE: What is your favorite piece from your collection?

AL: I have a combination of old and new. This bracelet is Lia Sophia, and it's one of my favorite pieces, but I also love Lia Sophia because the people who own the company are friends of ours, and their daughter, Sophia, and my daughter, Charlotte, go to school together. This vintage Chanel necklace is also one of my favorites. I got it on eBay, and it was a bit of a steal. I get a lot of my jewelry on eBay. I just really love vintage stuff, maybe because I was a history major, and it's different.

ELLE: You're not a fan of the "power suit." Instead, you enjoy getting dressed up and making a look your own. Who is your go-to designer?

AL: I have a few. I wear a lot of Douglas Hannant and Carolina Herrera, and I also wear a lot of J.Crew, believe it or not. I have a J.Crew suit that I've worn for a long time, and someone just asked me if it is an Oscar de la Renta suit. I like mixing things up a lot. My dress today is Zara—another one of my favorites.

ELLE: I loved when Sasha says in the novel, "Typical stay-at-home bitches. Hope your husband's hedge funds blow up." Have you ever had any of those moments?

AL: I had to re-read the book a number of times, and every time I read this line I thought, "Oh God, I would never say that, that's so terrible." I've never really had that direct a confrontation with anyone, but one morning when I was dropping my middle daughter off at school, I did see two women walking down the street with their tennis bags over their shoulders and their tennis dresses on, and I thought, "On what planet does that life exist, because it's not on mine." I have definitely noticed that some women take up a lot of room on the street, and it's almost like a part of an animal behavior where women are marking their territory. I'm always observing.